Publications

Information for X00093

The need for shelter finance improvements

The significance of finance is addressing housing need is widely acknowledged. In recent years there has been a strong emphasis on market mechanisms in development, and housing is no exception. Whereas opportunities to obtain mortgage finance have increased, many of the lowest-income households are excluded and no comprehensive strategy has emerged that could extend such finance to those who work in the informal sector. The growth of microfinance has helped support households that can only afford small loans, but the emphasis on those with relatively secure tenure limits the value of this strategy. Perhaps the most notable shortcoming of microfinance is its inability to address access to sanitation and water (MDG targets in their own right) and secure tenure. Although community funds do seek to address these issues, they (like social-housing initiatives) must continue to find sources of subsidy if they are to maintain the scale and accessibility of their programmes.